Government ignores supplier warnings on new IT tax

Ministers will carry on with widely criticised plans for a new IT tax system, ignoring warnings from suppliers that it has all the trappings of a serious flop.

A document has surfaced, full of suppliers panning the rush toward overhauled taxation based on a new IT system.

A report commission by the Depart for Work and Pensions, and leaked to the Observer, documented the concerns of IT suppliers who will be putting the system into place.

Meeting Iain Duncan Smith’s tight deadlines for 2013’s universal credit system will prove difficult, with little time on the clock for making it workable.

The complicated system, which must be tied in with HMRC in real time over PAYE tax, is thought to be largely ready from a “technology perspective”.

However, the confidential report said that timescales are “aggressive and cause for concern”, particularly as the “precise requirements are unlikely to be confirmed before the final bill is approved by parliament”.

The expected transition of “tens of millions” of accounts into the new system, over four years, could be hit – as “there may be thousands of exceptional cases that inhibit…the finish date of 2017”.

It’s an unrealistic project because “no alternatives are being prototyped”, and the eight months for core development are not enough to do the job properly.

This is exacerbated by the need to incorporate “additional traditional interfaces”, particularly with HMRC.

Shadow employee minister Stephen Timms stuck the boot in, agreeing that the October 2013 target looks “unrealistic”, with many parts of the complex scheme undecided.

The handling of self-employed tax payers hasn’t been factored yet for the IT, which will involve every employer sending PAYE data to HMRC each month.

“From my experience of past government IT projects,” said Timms, “there just isn’t time now to sort it all out before the deadline.”

IT expert Matthew Brown at the Chartered Institute of Taxation reiterated his fears that the project is being rushed through.

“It certainly is a concern that they might not be able to deliver this in time,” said Brown who has in the past highlighted concerns in HMRC’s system, a vital part of the universal credit scheme.

“Can they process the massive volume of data required or will it take time to ensure that they will be able to deal with it properly?

“It has always been the case that such government IT projects that they are not able to run correctly straight away, and these are two massive IT systems.

“So you only have to take a look at the history of government IT systems to see that it would certainly not be unexpected if it takes time for it to bed down.”

There are fears about Duncan-Smith’s excitement at getting his new universal credits system in place taking precedence over getting the technology to work. The consequences are potentially disastrous if it goes wrong.

It seems the weight of expert opinion, and indeed the opinions of everybody other than Duncan Smith himself, fall on deaf ears.

TechEye spoke to DWP but was simply told that the “Universal Credit is on track and on time”.

While refusing to comment on the warnings that had been given by its suppliers, TechEye was told that the department will “continue to work with experts from across the industry” on the scheme.

Considering the reaction from the industry so far, whether or not anyone’s going to listen to advice is another question.